Episode 21

What does YOUR data say about Cyber Week?

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00:27:27

December 8th, 2020

27 mins 27 secs

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About this Episode

With Cyber Week just in the rear view mirror, we’ve got a lot of questions for Ryan...Outside of revenue, how does a brand know if they were successful for Cyber Week? How do they know if money was left on the table? Or their goals were misaligned? What were the common missed opportunities in search engine marketing? What does a brand’s data say about their Cyber Week performance? When a brand looks back at their ecommerce data for Cyber Week, what should they be looking for? We've got even more questions, and we’re very fortunate to have access to Ryan who has answers!

TRANSCRIPTION:
Jon:
With Cyber Week just in the rear view mirror, I've got a lot of questions that I've been wanting to ask Ryan. Outside of revenue, how does a brand even know if they were successful for Cyber Week? Or how do they know if they left money on the table or if their goals were even just misaligned? And what are the common missed opportunities in search engine marketing that have been happening over Cyber Week? And what does a brand's data say about their Cyber Week performance? And I keep going here, but when does a brand look back at their e-commerce data for Cyber Week and what should they even be looking for? So, I've got even more questions, and we're very fortunate to have access to Ryan who has answers on things like this. Ryan, let's start with the big overarching question that is likely on the minds of e-commerce brands right now. Outside of revenue, how does a brand know if they were even successful for Cyber Week?

Ryan:
Yes. A lot of great questions, Jon. I would say revenue, most likely, is most important to brands. And so, we do have to look at that, but it gives you a very one-dimensional picture of what happened. The year 2020, almost anything goes and expectations have to be adjusted very quickly, almost in real time, of what we think is going to happen, we test it, we go, "Oh, that didn't happen. Great. Do this, this, or this." I think looking back on Cyber Week is going to be important for a lot of brands to really decide what you're going to do for the rest of the holiday season. Because for most brands, you rate in the middle of your holiday season, you still got a good solid couple of weeks left of really high conversion rates, high traffic rates, and a lot of time to make up for missings on Cyber Week or continue what was successful in Cyber Week, and really make it a holiday to remember for an e-commerce brand.
Step one, when I'm looking at data for a holiday season, I have two buckets of companies in the e-commerce world in my head. Either you have good goals or you have bad goals. Those are the only two buckets I look at. And thankfully, it doesn't really matter which bucket you're in, you can look at a certain metric that's going to help guide the rest of your analysis. Let's say you have great goals, and you are shooting generally in my world, you have great goals if you are shooting for a non-brand goal specifically. And so, let's say you had a breakeven goal during Cyber Week. And if you had a 50% margin after discounts and everything, you're going to shoot for a 2X. If you were above 2X during Cyber Week, either the whole week, or sporadically, or consistently, that tells me you left money on the table.

Jon:
Let's talk about that for a minute. When you're talking about a 2X, a 2X of what?

Ryan:
Your spend on Google, it's your acquisition market. That's generally where you can leave money on the table. Your organic traffic is set. You're not going to do any organic work and SEO work in the middle of Cyber Week and have it move the needle for you. Your acquisition market is going to be Facebook, Google, Microsoft, Amazon if you're on Amazon, and that's the leverage you can push and pull and move stuff real quickly. And so, generally, brands are going to go into Cyber Week with a goal. Generally, they'll set a goal for budget, set a goal for revenue. What are we going to spend on each channel? And what do we expect from each one?
If you were above goal, I'm going to tell you left money on the table. Now, a lot of marketing teams, a lot of agencies are going to go back to the exec team and be like, "Look how amazing we are. We spent your money and we were above goal. Aren't you happy with us?" I would be furious with my marketing team, and I'm the marketing team for my brand. So, I'd be mad at myself that, "What are you doing not spending more money to capture more customers?" I didn't want to shoot for, let's say, 4X on my non-brand. That's great that you did that. You got us more profit, but I would rather have customers than I would profit on my non-brand terms.

Jon:
So, using Cyber Week as a way to build your rolodex, if you will, right? To build up that customer list that then you can go and get more sales from later.

Ryan:
Yeah, that's what I do with every week, it's not just Cyber Week. My goal on every week of every year on marketing is more customers. And so, that's where I set my goals, that's how I use my acquisition marketing with Google, Facebook, Microsoft, Pinterest being a new one, that's pretty lucrative now. If you're not looking at Pinterest, you should be looking there. You're probably too late to holiday season with the setup times in there. But again, all acquisition market where I have a non-brand, new customer acquisition channel, I want more customers. And that's where I set my goal. And I don't want to overshoot that. If you're under the goal, and this is an asterisk, but you probably capture the market you could have. Now, there's a lot of things that go into that, was your conversion rate garbage because you weren't working with Jon? If so, then yeah, you might not hit row as you left money on the table, because you weren't converting as well as you could have.
This year's obviously unique. And there's no scenario in which you can say that 2020 is not a unique year, period. Based on what we've seen the previous 10 years of my e-commerce time. But another wrinkle coming into this year has been Smart Shopping. Google has been a big advocate for pushing for this. And so, Smart Shopping and Google has a big push this year. It was around last year, but it was a very small percentage of advertisers we were seeing with Smart Shopping. This year, a lot of advertisers in Smart Shopping, my gut tells me they're going to go back and look at all their Smart Shopping campaigns and that was a lot of missings. There was a lot of money left on the table with those.
Generally, it's because all of your search queries go into one bucket. You can't effectively, in Smart Shopping campaigns, separate out brand and non-brand at scale. Small little tests you can do, but it doesn't work at scale. And so, if you have a goal, it's going to include brand searches, non-brand searches, remarketing display, there's a lot of things bucketed into that campaign. If you did not adjust your goal for a promotion week like Cyber Week, you, for sure, left money on the... If you're shooting for... I'm going to make this up again, say a 5X. Your blended goal, 5X, in your Smart Shopping campaigns and you're like, "All right. We're going to ride that into Cyber Week." And the only change is going to be a promo.
Your competitors probably had a promo, they probably adjusted their goals down to capture more market share, knowing the competition was going to go up. And so, the smart campaign that's trying to hit the target row as a five in this campaign is not going to be able to adjust well against all this increased competition, increased click costs, increased conversion rates to really understand how and where to play well. It just doesn't react necessarily quick, and it's got to have a lot of data to make decisions. And so, I'm guessing, if you were in a Smart Shopping campaign, chances are you left some money on the table.

Jon:
And do you feel like that should be changed until the end of the year? Until we're through this high volume shopping area?

Ryan:
If you're in Smart Shopping now, chances are, you probably don't have a team that can move you off of that in time, chances. If you're with an internal team that has only managed Smart Shopping, they're probably, internally not going to have the skillsets necessary to build out all these granular ad groups needed to do a brand, non-brand shopping and push that way. If you're working with an agency that was running Smart Shopping, but also knows how to break out your search queries and set that up. Generally, I would advocate for that, because shopping can be changed very, very quickly in Google with very little penalty. The quality scores reset very quick and Google has even said that they are going to be on hand to make approvals in merchant centers and in shopping campaigns very, very quickly this holiday season. And we've seen that continue through.
So, I wouldn't be worried as much as long as there's proof that you have the ability to create that. Well, I would also say, I've talked a little bit about good goals, and if you've got bad goals and you're shooting for too high of a return on ad spend, and you weren't going from market share or customer acquisition, which generally, you need to be in a holiday period where the competition ratchets up so aggressively. If you didn't lower goals that's bad goals, you, for sure, left some money on the table.
And the easiest way to measure that would be to put, probably, let's say, a 10-week period on Google Ads, and just map out your return on ad spend or your conversion rate divided by cost, and see how that changed by week. And if it stayed flat the whole time and didn't move even through Cyber Week, there's probably money being left on the table. You probably could have been pushing harder through that time period. If it spiked and you got a higher return on ad spend, you, for sure, left money on the table. If it dropped and you kept pushing at the same investment level, you probably left a little bit less on the table at that point.

Jon:
Okay. Interesting. What are the common missed opportunities? And you mentioned the Smart Shopping, right?

Ryan:
Mm-hmm (affirmative).

Jon:
Are there other things that you have commonly seen be missed over these high volume time periods?

Ryan:
Yes. You have to be in the account constantly. And so, if you are running your own account or you have an internal marketing team, you are making changes or you need to be making changes daily, many times throughout the day during holiday periods. And because we're in a condensed environment where it means that less people are at retail stores, more people are shopping online even more so than the rest of the year, you have to be adjusting and pivoting to competition constantly.

Jon:
What should they be adjusting, I guess, is the question? What terms? The dollar figures?

Ryan:
A lot of times it's bids. And so, you're moving your bid. a lot of people will put in an automated bid system or they'll use Enhanced CPC on Google and assume that they are fine at that point.

Jon:
Yeah. Don't do that, because that's where I spend a ton of money, without making [crosstalk 00:00:10:06]-

Ryan:
Oh yeah, your $200 click, that was a fun one. One click, 200 bucks, gone. That's a nice bottle of wine, just to that click.

Jon:
Yeah. Well, lesson learned.

Ryan:
Lesson learned. Yeah. We got you back to some better spending habits. It's not going to be... Even those settings need to be adjusted all the time. And the larger you are, the more often you need to be in the account. And larger by an ad spend perspective, not a company perspective, but the more often you need to be in the account. Some of our largest spends, and we're talking seven-figure holiday spends by week, in the account, on the hour, looking at data, we have some clients that will be adjusting promos at 9:00 AM every morning. And re-looking at them at 1:00 PM based on the results. It's basically moving up. There's not many scenarios in a holiday season where you're moving bids down. The competitions only increasing, your competitors get more desperate because they're not getting sales and you are.
Brand terms are going to be especially good to stay on top of that. Make sure your competitors not coming in and trying to steal some easy clicks, keeping your budgets up. And so, if you went through holiday week, for example, and you were limited by budget all week, because you set a fixed budget saying, "All right, we're going to spend X dollars. I'm going to spend $5,000 on Cyber Week, not a penny more." And you left money on the table. If you had a return on ad spend that was acceptable and you had limited by budget, why would you not spend more? Unless you're on purpose losing money to acquire customers, then you limit it based on what your CFO tells you. But for most companies, you don't want to be limited by a budget if you're hitting goals

Jon:
Okay. That's really insightful. And I have a follow on to that, which is assuming that a brand has had to spend a lot more because pre-Cyber Week, we saw how Facebook ads and Google Ads were way more expensive. The invested dollar did not go as far as it was going pre-pandemic or earlier in the year for instance, right? With all those costs going up, what are you... And I'm hearing from you, you should be spending even more right now, right? Because you're only going to adjust those bids up. What should a brand be thinking about spending the rest of the year? Not in terms of dollars, but is it... And this might be something that's just a based on a per account basis, but overall, should brands be expecting to spend twice what they were normally budgeting during this time period? Or is it a certain percentage that you're seeing brands? Are budgets have gone up and just need to be budgeting for the rest of the year?

Ryan:
Tough question, because every e-com business is going to be a little different. Some e-com businesses, 80% of the revenue comes between Thanksgiving and Christmas, and you can't possibly be spending enough. Others are pretty flat throughout the year. Some, like in the auto parts world, generally, this is slower than it's going to be in tax return time come January, February. So, it's going to depend. But one of my favorite quotes in a good movie called Wall Street was, it's more, at the end of the day. You generally need to be comfortable spending more, and it can make you uncomfortable committing to that. But, I, as a person, hate constraints, just as a general rule. I hate being told what to do. I hate having guard rails put in place. I know they're necessary, but it doesn't mean I don't push against-

Jon:
This is why you have a farm with a lot of land.

Ryan:
It is, yes, it helps. But I hate budgets in the digital marketing world. You shouldn't put a constraint on your marketing budget and say, "This is how much I have to spend. It doesn't really matter what happens." That is a huge fail that a lot of business owners and exec teams get caught in, because it's how we've budgeted marketing since we've had business. Thousands of years, you'd be like, "Okay. I have this much to go market my produce at the market." Now, because you actually pay for Google clicks after you collect the revenue, you can be free to spend more as long as you can fulfill the orders. And that is a constraint coming up here. UPS, FedEx, USPS, there are some physical constraints to how much can fit through the shipping pipeline.
There's also constraints on inventory. If you're out of inventory, obviously you're not spending, but you sold all your inventory, that's fantastic. Go enjoy the last weeks of the holiday season and not worrying about selling anymore. But then, be mad at yourself that you didn't buy more inventory. So, spend more, but understand generally, marketing channels for acquisition are getting closer and closer to a vacuum in which all of that first order profit goes to the platform driving the sale to you whether that's Google, Facebook, Microsoft, Pinterest, Etsy, Amazon. The ad platforms are phenomenal at getting that margin, because competitive people like myself, getting into the saying, "I don't care if Google gets all of the margin on the first order, because I'm going to make money on repeat business. I'm building my email database. I have phenomenal email marketing. I have a phenomenal product."
The more people look into marketing the way I do, the more of that margin is going to Google. Five, six years ago, it was not tremendously difficult to have a decent margin on that first order from Google Shopping. Now, I think that is going to be more and more of a rarity just because of the... Just the nature of so many competitors and very limited real estate on the screen.

Jon:
Let's talk about this. Say I'm a brand, not one of yours, but brands that is out there, and I missed out on Cyber Week. I listened to everything you just said, and I am kicking myself because I've missed out. And I'm at the point where I have some ground to make up between now and the end of the year to hit my numbers. What would you suggest here?

Ryan:
Step one would be adjust goals down so you can spend more. Take the constraints off of your budget, and if you're shooting for a profit, even if you are on a smart campaign, you have to take some guesses and figure out how much of your orders are brand versus non-brand sales, that's going to be in Smart Shopping and educated guess at the end of the day. Based on the size of your brand and new file customers you're getting, but adjust down so that you're fine breaking even. If you have a 50% margin, and I was stuck on a Smart Shopping for the rest of holiday, I would set it at a 2X goal, jack the budget way up, and let Google go find it, and find some opportunities for you to be in there. Lower goals, increase your spend level.
And in lieu of discounting, which discounting is one point I'll talk about, I know one that you don't like, but at this point, becomes almost necessary evil to get some market share that if you were out-discounted by your competitors in Cyber Week, Cyber Week is an anomaly where, to a degree, I would go against Jon MacDonald a little bit and just say, you've got to discount, everybody's expecting it. And Google Shopping being the biggest Avenue for acquisition for e-commerce brands, if everybody else is discounting and you're not, you probably can't bid enough on a cost per click to compete even. It's just, Google's algorithm is so sensitive to price that if you're giving a 10% discount and your competitors giving a 25% discount on the same product, they're going to win almost every single time. Really doesn't even matter what you bid.

Jon:
So, doing things like offers, BOGOs or gift with purchase, Google's not going to pick up on that. You're just going to lose out because you didn't do the price discount.

Ryan:
Exactly. And it's unfortunate, really, at the end of the day, because I really, like you, advocate for creative bundles. I love giving free shipping to your loyalty program if you do have a minimum shipping threshold, but those just don't translate to Google Shopping and actually getting a traffic. And so, you might need to start discounting to try to make up for the fact that you weren't discounting enough earlier. And so, you have to react a little bit to your competitors. If they're giving 10% off for this week, maybe you jump to 15, maybe 20%. And then, you will also, generally, be rewarded with a lower cost per click in Google Shopping.

Jon:
Okay. So, you get some of that back in theory.

Ryan:
You get some of it back. And what most brands and marketing teams as well, and even some agencies, aren't paying enough attention to in Google Shopping is the halo effect. And I think I've talked about that a few times on this podcast, but the more you spend in Google Shopping to acquire traffic in non-brand terms, so people that don't know who you are yet, they're looking for your product, the more traffic you're going to get in organic traffic, from Google organic, Bing organic, Yahoo organic, the more direct traffic you're going to get, and the more email you're going to collect. And you're going to get revenue through email, because Google Shopping is so good at introducing people to your brand, it doesn't actually... If it's run right, often, you will actually see more assisted conversions than last click conversions analytics from Google Shopping.
And so, that's why breaking even on Google Shopping is not a bad thing at all. And in fact, you're not losing money, you're building up credit card miles for your wife, for your husband to go off and travel with you after the holiday season. But you're also getting a lot of extra profit through increased direct organic and email.

Jon:
Right. Makes sense. Thinking about that, what about Microsoft Ads? Should we be looking at additional channels assuming that you missed out on Cyber Week? Now, you're pushing other channels as well.

Ryan:
Jon, you know me so well. Microsoft Ads is a layout for almost... And if your stall is [Jon Macdonald 00:20:08]. But it's the easiest marketing that most companies are not taking advantage of. It constantly surprises me how many companies I'll talk to that just aren't spending on Microsoft Ads that's like, "We did in the past, it just wasn't doing much. So, we just turned it off." I'm like, "There is so much easy money there." The conversion rates are almost always higher. The competition is lower. Yeah. There's not a ton of search volume or near this... I mean, there's a lot, there's billions of searches there, but it's just, in comparison to Google, not nearly as many. But take it, get out there, get more aggressive on Microsoft. Get there if you're not there.

Jon:
Do you have any other final thoughts on this? What else should brands be doing? I know you well, but I'm out of ideas of what I would think people would do.

Ryan:
Well, where we're at in the holiday season, there's still a lot of sales to be had. And so, I haven't even bought a Christmas present yet. I'm a free agent at this point. And I always am... I don't buy my... I'm so busy in the e-commerce world, helping other brands-

Jon:
Ryan last minute Garrow over here.

Ryan:
It's terrible. Yeah. And when we can go to stores, I'm always the first on Christmas Eve freaking out buying what I can. Free Shipping Day and Green Monday are on the same day this year, December 14th. Green Monday is not necessarily a holiday that we talk about outside of the e-commerce world. But that Monday every year in December is the highest online shopping day of all of them. Unless Cyber Monday happens to get into December, which I think it might've been last year. And so, it's a big day still coming. You want to be prepared for it. You don't have to call it out as Green Monday, because most people not in the e-commerce world don't even know what it is. They just know that our app work and they're shopping rather than working on Green Monday with everybody else. So, be prepared for that.
You're going to give free shipping out that day. Just give it to people. You need to be a little more creative at this point if you're trying to make up revenue with free shipping. My brands, I try to give free shopping on everything. I don't even want it to be a barrier to conversion personally. So, if you can lower your free shipping threshold, give it on everything, that's better often than giving a discount. And so, using easy math, let's say your free shipping threshold is 50, but you've got a lot of products that are 25 bucks. Okay, well, rather than discount those $25 products 20%, giving them, basically, five bucks off, why don't you just include shipping? It doesn't have to be fast shipping. They can pay for two-day if they want, but just say, "Hey, it's free shipping on everything." And that will often go much further or just as far, but you won't be seen as a discount brand. So, your lifetime value on those customers can be higher.

Jon:
That's great. Let me ask you a question about shipping. Pre-Cyber Week, we saw a lot of shipping delays, and that's been happening a lot. I know that even companies like ShipHub are setting up trackers to help brands really understand what shipping times were looking like and they were obviously extended. Do you think post-Cyber Week that... I mean, December 14th, you got 11 days to get them a package in theory. Probably 10, right? Because you really want to get there before Christmas. So, you have 10 at most. Is it possible? I guess, that's my question. Is it something where brands need to start thinking before December 14? Is it something where like, "Hey, this shipping cutoff date has got to be earlier. So, all the chips on the table, just push them all over for that first week of December and just be done with it." Right? Is that something brands should be thinking about this year, because the shipping delays?

Ryan:
I mean, again, it has to be in the back of your mind for sure. And I would think that most delivery systems given 10 days, even in holiday, are probably going to do okay. I assume there's still going to be late packages and people will be celebrating Christmas gifts the following week into New Years. Leading up to Christmas this year, it's an entire week of shipping days. I think the last couple of years Christmas was on Saturday, Sunday or something, or it was set up in a way that we didn't have as many... I think it was on Tuesday recently, where there was a whole weekend where maybe shipping wasn't done as well leading up to it. We've got a lot of shipping days. And I think that because of COVID, there's been a lot of investment in the shipping space. And so, I think, we're going to be in better shape than we would have been normally. But still, we are cramming a lot of e-com through these shipping companies.
And so, as a merchant, I would probably do my guaranteed shipping cutoff on USPS, probably right around free shipping. And then, work with my FedEx or UPS reps to figure out realistically when I should be cutting it off. And they should have a good idea, I think, internally, on what that should look like. But understand too, you're going to have some customer service issues. If you're not using Route yet on your site, I highly recommend putting it on. If you're on WooCommerce, BigCommerce or Shopify, you can just push a button, and then get it on there really quick and easy, and let that shipping insurance cover you for some of that struggle.

Jon:
That's a good point. Yeah. Then at that way, if things don't show up on time and they've paid extra, they can then get that. At least, that expenditure back to some degree or if their packages get stolen in transit or from their porch, then they get that [crosstalk 00:25:30]-

Ryan:
Yeah. I think there's going to be some porch piracy coming up unfortunately.

Jon:
I'll tell you what, I have seen it, I should say, already. Great. Well, any other comments on this? Today has been super insightful for me. I've learned a ton like I always do. So. Thank you for educating me. Anything I missed?

Ryan:
I would just say if you're at this point, and you're having to make up ground, it's time to start throwing some Hail Mary's at this point. I mean, you can't possibly test or try something that... Even if it has a low chance of succeeding, you got to make an effort if you're trying to make up ground. I would even, potentially, look at doing some social promos with complimentary brands even. And if you're going to do that, you're going to have to go big during this time period to get through the clutter, and you're going to have to promote it. So, if you're going to do a giveaway, it's going to be a, "Hey, we've got a two or three-day window. We're going to push hard with ads, get a crazy thing given away to people to draw some attention and try to get some eyeballs on something." Build up some audience lists, you can market to them or remarket to people. But really, nothing at this point would be off the table in my mind in trying to get eyeballs to the site and try to get some conversions.

Jon:
Awesome. Well, thank you very much, Ryan, and go Beavers. For those who can't see Ryan right now, he's wearing the Oregon Ducks gear through and through. And the Beavers, the Oregon State are their biggest rivals. I have no stake in that claim being an Ohio boy. I'm Ohio State all the way.

Ryan:
Well, maybe we'll meet in a bowl game somewhere.

Jon:
Yeah. Well, hopefully.

Ryan:
That neither of us were able to go watch in person.

Jon:
All right, Ryan, thank you for your time today and educating us as always.

Ryan:
Thanks, Jon.