Holisitic Optimization of Digital Marketing for Ecommerce

If you are spending less than 8% of your sales on advertising, you may be underspending! Digital Advertising is driven by Ecommerce. And perhaps a little by branding, which is financed by commerce  too. Global Ecommerce was over 4 trillion dollars in 2020 (statista). Comparatively speaking, digital advertising is a midget, at 330 billion. So, global digital advertising as a proportion of global ecommerce is 8%. There is your benchmark, but how should you spend your advertising budget?

Spending where it works

Wanamaker famously said that one half of advertising spend is wasted, the trouble being that you don’t know which half. Fortunately, we are now in the world of digital advertising where everything is measurable, right? If only it were that easy. As we have undercovered in the Digital Marketing Report, all marketing decisions are taken on the basis of partial data: incomplete, unreliable, unshared, adblocked, webproxied, wrongly attributed. All digital marketers know this, most advertisers too, the majority of end-users don’t. “When I enter information into a website, why should it be shared with all those other sites?” – well it isn’t. Apple’s current advertising is about removing all the other platforms’ partial data collection so that only Apple can monetize that data. Logical movement of troops in the what we call the Data Wars, but not motivated by Apple wanting to protect it’s users, in my opinion.

When marketers look at data from the big marketing platforms, there can be biais in the interfaces too. Did you know that Google analytics shows “sampled results” over a certain threshold of data volume: you see a simulation of what data trend is in your activity, not real data. Explain that to your CFO, will you? Newer concepts such as “data-driven attribution” and “modeled conversions” are pushing in the same direction of predicted data rather than real data.

And most platforms are excellent at pushing their collection of packaged data to marketers. The big platforms are marketing data to their clients, the marketers, using great packaging, promotional outreach, gamification.  Dear marketer, did you not know realize that it is you the target audience?

Digital media spend is biaised to promotion

The most reliable data, is found when a marketing operation is carried out exclusively on one platform, and when the path between product discovery and the final purchase is short and uncomplicated. The longer the path gets and the more complex the decision-taking, the less reliable the data tends to be.

Unsurprisingly therefore, Amazon is booming. It is concentrated on the final path to purchase. Also unsurprising, retargeting works really well. Both are close to the measurement point for your sales KPI. And a well-known observation from search marketers, “brand keywords convert”: first users search for category words and when they have found the brand they want to buy from, they search for the brand name. For this reasons, brand keywords are more often attributed the sale.

This challenge of “attribution” has a huge impact on the way budgets are engaged. The data is biased, and subsequently, so are budgets.

In many cases, the data doesn’t tell the story of what happened before the final conclusive action that made a user purchase. Whether this was other keywords that were searched for, or how the person you retarget was identified in the first place. If you really want to optimize your marketing investment, you must look at your entire marketing and communications operation holistically from end-to-end.

Understanding the user journey

Heard of the “funnel” for digital advertising? It was invented in 1898 so predates most digital marketing by a century. Kind of old and outdated, right? Or maybe it isn’t.

The reference concept behind the funnel is the AIDA model. It is a “hierarchy of effects” model in which users are described as moving through stages before buying a product. Awareness, Interest, Desire, Action. The funnel model is for digital marketers, what the “economic man” model is for economists.  The economic man model explains that people make rational purchase decisions and will be more likely to buy a cheaper product than a higher priced similar product.

The funnel model, explains how a user goes through various stages before coming to a decision to buy a product, including becoming aware of the products’ existence, understanding it’s characteristics and finally acting on an impulse to buy it.

Marketers instrumentalize the funnel model to create “awareness” around a product to target audiences, then provide them all the product information they need in order to appreciate and consider buying it. This drive through the funnel is designed to persuade and eventually incite users to buy the product. Here is a more detailed walk-through of digital marketing mechanisms and the stages of the user journey.

Opportunistic marketing

In the TV age, there were few but powerful marketing channels and few but powerful distribution systems. Optimization cycles were long. Study the market, build a creative concept, produce assets, run the campaign flight, stock up in distribution channels, analyse communication and sales results post-campaign. Marketing was a high budget, high risk and high returns business.

In the digital age, marketing channels are fragmented and fast. So are distribution channels. And user behaviour can be erratic too. It has become less risky but more confusing to be a marketer. You can trial and error, you can seize opportunities as they arise. If you are doing no marketing whatsoever, your first action can drive amazing results, and subsequent additional actions can have seemingly no effect. Worse, you can run a number of parallel marketing activities and find conflicting conclusions in the data sets.

What happens when you optimize holistically?

Because of this opportunistic marketing behaviour, the bigger picture is often lost of sight. Applying a funnel view of marketing activities can help identify bottle necks or explain why performance diminishes over time. The key to holistic optimization is to keep an eye on your total investment and your total outcome. It doesn’t have to be 8%, it really depends on what is profitable for your business. It also depends on your goals: if you want to win more marketshare, you should probably spend more than your competitors. If you have a strong brand, perhaps you can get away with spending less to maintain your market share.

With your eyes fixed on that overall performance, you can now look into individual channels and opportunities. It is quite common to see advertisers spend a lot of their budget at the bottom of the funnel, because it is measurable and gives the illusion of high performance. But in some cases, bottom of funnel budgets are cannibalising what we call “organic” performance. You put an ad up and it drove the sales, but the user was going to buy the product anyway. And sometimes you can end up bidding up your own marketing in other channels or perhaps your distributors’ marketing costs for selling your products.

If you think this may be the case in your marketing set-up, try moving some of your budget up the funnel. Reach your target audiences on facebook, target category keywords in search and promote your brand on Amazon. This can stimulate overall performance and allow you to generate better results holistically.

Don’t trust channel-specific performance

One of my favourite films is Minority Report. It depicits a society where truth is established in a closed room where three extraordinary beings can see what will happen in the future. Except, sometimes they don’t agree, and one of them will disagree to generate a minority report.

This can be compared to marketing reports emanating from one marketing channel. All the data isn’t there, but the truth that emerges seems compelling, whereas in reality it is incomplete and sometimes even false.

Everything is measurable in digital marketing, except for all the incomplete data, the biaised data, and the fact that advertising platforms are marketing their product to the advertiser without disclosing their minority reports.

Only a holistic view of all marketing activities can help you learn what balance of media spend and channels works for your brand, so check with your CFO before signing off on the next advertising opportunity you are presented with, and take a chance on channels that make sens from a funnel perspective. They may be more inclined to drives results in the long run.

In the 1990’s web search engines were the big thing and ranking at the top of search results pages was like winning at the roulette. I remember how important it was to repeat the same keyword over and over again, and to have the keyword in the page title was crucial to ranking in Altavista – the now-forgotten predecessor to Google.

In those days, Search Engine Optimization – SEO, was a nascent industry and most experts were constantly testing to improve their understanding of each search engine’s algorithm. We counted the words, the characters on a page, the number of markup tags and their nature, we removed the “stop words”; fill words that were believed to not be indexed: is, in, at, the, or, because. After removing them, we calculated one of the key ranking factors in that generation of search engines, the keyword density. Could you get it up to 4-5% you were good – in some search engines you had to go even higher to rank.

With Google, the game changed somewhat. It was a new generation of search engine and suddenly, it was not only what was inside the page that counted, but also surrounding factors, and especially links pointing to the website. The nature of SEO changed, link building became a thing. The Google algorithm is believed to have hundreds of ranking signals, some known, some guessed, constantly evolving to provide the most relevant search results to users with changing search behaviour and evolving technology, and all the while keeping abuse at bay.

What is Amazon SEO?

Search Engine Optimization (SEO) is about maximizing the traffic one receives from clicks in search results pages. Users search on a variety of keywords, and the first challenge is to identify the ones that are relevant for your products. The next is to do everything in your power to appear in search results when a user searches using those keywords.

SEO is often consider as a free means of promotion as it does not take sponsored results and other paid ads in the search results page into account. Into consideration even.

SEO on Amazon is focused on optimizing the product listings for a merchant. Each individual product listing has the potential to rank in search results if it is relevant to the search a user performs. But like in traditional SEO, it is not only the page content that matters, external factors are important too. Popularity, authority, links pointing to a webpage are important for ranking on Google. But what is important to make your product rank in the Amazon search engine?

The Amazon search results page

The Amazon search results page is very long and holds many categories of information. The illustration reconstructs an entire search results page and shows the various categories as well as their order of appearance (click to enlarge).

The results categories we found on this page are the following:

• Sponsored results: The top row of products are all sponsored products. This means the brand runs Amazon Sponsored Products advertising targeting the keyword we searched for.
• Best seller & Amazon’s choice: A best selling product in a category carries a badge and is prominently and repeatedly shown in search results. Getting in that position is a huge challenge, as you need to reach the highest amount of sales in your category.
  Amazon’s choice is an editorial choice made by Amazon editors based on a qualitative review.
• Highly rated products: In this section, the products are the ones with the highest ranking based on user reviews. Another great spot to be in but very difficult to reach too.
• Editorial choice: A great chance to stand out if your product is differentiated and discovered by the editorial team.
• Advertising: In this case it was a video advertising results finalizing the custom made top of page spanning more than the first viewable page of results on your screen.
• Organic results: Below the custom-made section comes organic results. It is mainly here SEO makes a difference, and being at the top of this section is a great achievement and can boost sales for a product.

Main ranking factors in the Amazon search algoritm

You can appear prominently in the Amazon search results page via advertising, by being the best selling product, having the highest rating or by having the favour of editors. Beyond those instances, the order of the page is ordered by the algorithm. The A10 algorithm if that is indeed the current version.

There are three main categories of ranking factors in the Amazon search algorithm:

• Product attrativeness
• User experience
• Sales maximization

Source: The Amazon Marketing Report: “Marketing on Amazon 2020”, Innovell 2020

In our illustration we have shown the three categories as well as the individual ranking factors that play into the algorithm. These are further affected by a number of indirect factors as illustrated in the table below:

The range of factors influencing search ranking is long, and optimizing for better ranking can be an ongoing process. There are however, some basic things that need to be in place in order for a product to appear in searches: available inventory, the right price, good ratings and relevant content.

Is Amazon A10 or Amazon A9 the current version of the algorithm?

Right about the time we built the above ranking factors overview in Summer 2020, industry observers reported changes in the Amazon algorithm. This made a number of people announced that Amazon had upgraded to A10. The number of changes in the algorithm wasn’t very high, though. So, was there really an update or is it still a tweaked A9 algoritm we have a hand?

I decided to check what my network on LinkedIn thought, and a majority of people believe the algorithm is now A10 but quite a few voted for A9.

So if there was an update in the algorithm from A9 to A10, what did it do? Most observers mention a higher importance of traffic from external sources. This is a great case for directing external advertising into Amazon campaigns, something we call the “Drive-to-Amazon” strategy.

Some of the other things that changed with the A10 algorithm update was toning down the effect of Amazon’s own advertising and focusing less on sales velocity as opposed to content relevance. These observations are mostly based on hunches and anecdotal evidence.

In the end, who makes the call on what the algorithm is called? Amazon supposedly. But the company is not so accustomed with communicating about internal affairs, so I have found no confirmation of a shift to A10 anywhere. And, at end of the day, what does it matter?

All you need is excellent products, content, sales and fulfillment

Be it A9 or A10, the formula for success on Amazon is fairly well-known: Provide an excellent user experience, sell at a competitive price, and be an active player in the marketplace with a high rate of sales and great reactivity.

Succeeding on Amazon starts with building a strong foundation via optimized product listing and a brand store. Next the build-up of sales history, user reviews and top ratings will make a product climb the sales ranking. Maximizing those sales via Amazon Advertising makes you climb faster, and plugging in traffic from external sources can provide a further boost.

The upside is that the prize money can be well worth the effort. Being at the top of the Amazon search results drives a disproportionately high level of sales. Great user experiences, great SEO and efficient advertising is the key to winning on Amazon. Go for gold.

If you want to go deeper into Amazon marketing and successful strategies on the marketplace, the Amazon Marketing report can help you. It is a commercial report. Discounts are occasionally shared via our newsletter. 

(Day 2 is here: Penalty recovery, snaploggin, e-privay, chatbos and DSA)

This year’s SMX Paris is in a new venue but some things do follow traditions : they start with a railway strike so that everyone is late, just like the past 3 or 4 editions. We are at Marriot Rive Gauche close to Denfert Rochereau in a very nice set up with a central area and access to three different tracks on the side.

BADams 

My first stop is on the SEO track as I finally get to meet Barry Adams face to face. I do love your twitter handle, Barry – @badams. A bit of a legend and his first time on SMX Paris, although he has actually lived and worked here many years ago. Barry is here to tell us about SEO and Javascript rendering. As he starts out telling us how Search Engines work, I get worried for a moment – is he process of Crawl, Indexation and Ranking because the Indexation step actually splits in several phases with an initial HTML crawls like always and then the second crawl with a Chrome 41 user agent rending the Javascript version of the page.

Barry makes an excellent case for Server-side rending of Javascript through solutions like Angular or React (preferred) and we get to understand why Client-side Javascript for anything else than stylesheets is bad news for SEO. As the initial crawl sees no data and only schedules a second crawl – which can take 1-3 weeks to arrive and which is more demanding on resources (hence more costly and less attractive to Google) – there are very clear down-sides to using client-side javascript rendering for a website.

My question to Barry was:

How does this type of javascript rendering work out for tools like Webshed who allow you to externalize the management of your SEO optimisation?

Barry talks about SEO split testing tools and the fact that they can be slow because they need to wait for the 2^nd crawl and it’s rendering of the changed code. Thanks Barry 😊

Online marketing and the AI perspective

I change tracks for the 2^nd sessions and go to the BingAds track. They have teamed up with some people from WPP – disclaimer: I used to work there – to build this session. It is a half French, half English session. We get insights into some of the things that Microsoft are doing from Alex Sinson. Very impressive indeed. Richard George @richgeorge from Wavemaker steps in to give insights into AI and Big Data. Admittedly, a lot of the content presented is not reeeaaaaaly about Artificial Intelligence and more about Automation and the overall technology changes we are facing – but it is a great way to make the topic concrete. I absolutely love the case study on breastfeeding in the UK where Wavemaker worked with the British Government to create a Skill on Alexa (Amazon) – it is like a voice chat bot that works around the clock and especially between 2 and 5 in the morning when breastfeeding mothers need advice and comfort the most. Great use of technology for a noble cause.

My question to Alex Sinson of Bing @BingAdsFR:

what are your thoughts on Quantum computing. Recently, I heard people from Google talk about Quantum computing becoming a reality within 12 months ?

No official announcement from Bing here but an acknowledgement of some major shifts coming up. Richard George adds in to confirm the importance of Quantum computing to solve some of our upcoming challenges in terms of data handling.

Thanks for a great session from Alex Sinson and Richard George.

The new challenges for Paid Search (Expert panel)

I am staying on the BingAds track as they have set up a panel discussion on a subject I really care about : major trends in Paid Search. This is the topic I will be presenting on the European Search Conference in Liverpool so of course I will be listening very attentively to the panel discussion.

Some extracts from the panel inputs:

Oui.sncf : Damien Boistuaud explains how their main challenge is to qualify audiences and target the younger generation. Automation is a big thing for them this year as they are running Dynamic campaigns and Dynamic ads.

SFR : Benito Donison is not convinced by the concept of User journey as he feels the tracking tools do not perform well enough to support that approach. He is more focused on integration Drive to store into marketing mix.

The Experts panel – best photo I could get…

The founder of Resoneo, Richard Strul @RichardSTRUL, gives us the best input (disclaimer: we are good friends and have known each other for 10+ years) : Main challenges are related to Audience qualification and segmentation. In the case of their client Allopneus, they aimed to push the qualification of 23% up and managed to reach 60-70% by integrated data from all the ad platforms. This created a new challenge of work load and forced them to do intensive Automation in the set-up. Richard also stressed the rise of Shopping representing sometimes up to 60% of the full ad budget for some clients

I liked the session and was happy to see a lot of the themes I will be presenting in Liverpool mentioned:

• User journey
• AI
• Audience segmentation
• Automation

Keynote with Andrey Lipattsev @andrey_l1nd3n, Google

How can you not love what this man tells us :

« We love the Web because it is the biggest collaborative project in Human history. ».

Where we do diverge in bit in our opinons, Andrey and I, is that he believes AMP (Accelerated Mobile pages) and PWA (Progressive Web Apps) are major improvements to the web experience, where I see them as temporary patches to something we haven’t quite been able to fix : the free and open internet.

IA tools for SEO

I was curious about this session. On one hand because of the title which didn’t quite make sense to me; I was really not expecting SEOs to be thinking about AI tools at this stage – generally speaking, I find the subject of IA hyped and exaggerated. But on the other hand, I was curious due to fact that the speakers are two very clever and very respected Search Professionals, Sylvain @speyronnet ‏and Guillaume Peyronnet @GPeyronnet. The original Search Bros 😉

This ended up being one of my absolute highlights of the day as the guys explained who Search Engines convert phrases into vectors and how these mathematical objects are being manipulated and handled to create search results. And in consequence, how the only way to create semantic clusters are by ways of using similarly machine-learning driven approaches to generate the keywords you want to use to create the perfect cluster enabling you to hit the algorithm.

The Peyronnet brothers explained the algorithm of Rocchio and the importance of user rating feedback into the ranking system. They also demonstrated how you could use machine learning techniques, decision treees, « R » and « Random Forest » techniques to do your own ranking factors study. As always, the data input makes all the difference and is the biggest challenge for any research you do. You need high quality, homogene data in decent volumes to be able to make any real findings.

I am surely not doing full justice to this session by means of these explanations but I was truly inspired by this very technical and in-depth presentation that pretty much explained how Rankbrain probably works.

This was the session where I didn’t ask any questions. Thanks guys !

Microsoft Bing outlook

For the last session, I went back to the Bing Ads track. I was interested in understanding where Microsoft are going and this session was giving a full perspective of the state of the art at Microsoft. Microsoft presented the « Microsoft Graph » – the mapping of the various data points they can use for their various Advertising solutions. Worth noting that LinkedIn is now part of that mix allowing you to target Companies, Professions, Job titles in your digital marketing.

During the day the concept of AI As a Service (AIAS), had really dawned on my. IBM Watson is a remote service and Google’s ML services are tools you can plug into. Microsoft explains this as their « Cognitive Services » and these are also tools that you can access via APIs

Microsoft demonstrated a number of application based on face recognition and sentiment but my preferred case was the video depicting a blind Microsoft engineer who has developed a tool by which he uses Microsoft AI to inform him about his surrounding by the use of photos, image recognition and sound restitution.

My question to Bing :

I am really impressed with your use of AI for image processing and voice. Are you using any of these tools to identify things like Propaganda, Fake news and Fake profiles?

The answer : all of our AI tools in Microsoft originated from Bing which is where we have had the most use for these tools. They are applied to things we see on the web and remove before we show them to users. We can not reveal how we do this.

I had hoped they would make some tools available to the wider public and maybe use human input so we can all Fight the Fake together…

SEMY Awards

The day ended with the SEMY Awards ceremony celebrating the best French case studies in various categories. This is a great addition to the SMX conference and I have great respect for the various winners of the Awards. We had an odd moment of power outing but got safely through to the networking cocktail at the end.

Want to follow?

A long day at SMX full of inspiration and great discussions. I have been tweeting a lot of this during the day on @soanders. Some in English some in French. Please follow me on Twitter if you find this useful.

Or read on. Day 2 is here: Penalty recovery, snaploggin, e-privay, chatbos and DSA

There are 29 different categories and I am convinced that most agencies, in-house teams and software editors will have at least 1 outstanding client story to submit.

Building and submitting a case study in itself can be an enriching experience and it also allows you to benchmark your organisation against the market. Will you make the shortlist? Could you win one of the trophees?

Shortlists are due to be published on the 23rd or March. And all the excitement will culminate in an amazing Event ceremony which will be held in Prague on 16 May.

You can submit your entry here: European Search Awards