Published on May 4, 2020
Over one hundred years ago, John Wanamaker said, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Many people today would argue that SEM addresses Mr. Wanamakers concern. I would argue that SEM only exacerbates the concern. Much of the traffic generated by SEM results in bounced traffic, window shoppers, or early-stage shoppers. The latter two aren’t necessarily bad things, but they do make it more difficult for Marketers to optimize their media efforts efficiently.
I am not an SEM Marketer, nor have I ever been. However, I have been in digital advertising for 25 years and I know a few people… Typical SEM optimization involves looking at the conversions and back-tracking to see which words drove the most conversions. Once this has been determined at a statistically significant level, money is shifted from the perceived poor-performing terms to the perceived well-performing terms. There are two problems with this approach. First, it will take a lot of conversions (and a lot of spending on clicks) to generate statistically valid results. Second, this method ignores all the active shoppers who haven’t purchased yet for one reason or another. We can refer to these users as the upper-funnel shoppers.
This is where Mr. Wanamaker comes in. If you market to all of these upper-funnel shoppers, you will likely be wasting 50% of your budget, give or take, because many of these website visitors aren’t real shoppers. They could be window shoppers, comparison shoppers, or fraudulent bots. Many people and companies between Wanamaker’s time and today have tried to isolate the right 50%. That is a very difficult thing to do, especially at scale and with consistency. Fortunately for us living in 2020, AI-based technologies are changing the way many things operate, including digital marketing.
Many people and companies between Wanamaker’s time and today have tried to isolate the right 50%
At Cogent, we decided to work with Fixel because their AI technology has figured out how to isolate the right 50% in the upper-funnel. They can determine how engaged a shopper is within that 50%, so that brands can message to individuals appropriately based on where they are in the purchase decision. This means that instead of delivering ads to everyone, brands only deliver ads to the 50% that have a real potential to buy. Brands then increase the odds of conversion because their messaging will be spot-on. The result is an ecommerce business that scales more quickly and more cost-efficiently. In Cogent terms, as a brand, you will generate more with less.
“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
American merchant and religious
An additional benefit, is that once you understand which shoppers in the upper-funnel have a higher likelihood of converting, you can use this data to inform your look-a-like modeling across all your marketing channels (including Facebook, Google, The Trade Desk, Twitter, etc.) By building audiences with Fixel, brands can build accurate models which are more broad, allowing for greater scale in these efforts.
Fixel has been doing their part during the COVID19 crisis to help its customers better understand their increased traffic levels so they can react appropriately. Many of you are also observing increased website traffic, but maybe your conversion rates have dropped off. This increases the all-confusing upper-funnel traffic, making it even more difficult to optimize and adjust your strategies during this difficult time. To help the cause, Fixel has decided to offer a free report that shows Marketers which of their site visitors are the highest value along with a waste report showing how effective (or ineffective) their ad spend is today. The founders (Etgar Shpivak, Hadar Shpivak) are experts in this category, and their hope is that during this crisis their expertise can lend Marketers a helping hand. Here’s the link to sign up: https://lnkd.in/gki8WEe and here’s a sample report https://lnkd.in/gpmm_p5 #marketing2020 #ecommercebusiness