If you follow me on Twitter, you know I’m a scathing critic of the New York Jets and an uninvited commenter on the Real Housewives of Atlanta.
You may have noticed, though, that I am a tireless advocate for SEM audience and asset segmentation.
Brand vs. non-brand, first-time vs. recurring visitors, high HHI (high household income) earning women aged 25–35 vs. coupon customers aged 65 and up. Every aspect and target audience is unique.
It’s absurd to subject everything to the same measuring standard.
“Jon, I have an overall aim,” one may remark. I anticipate that all efforts will be successful. Otherwise, it’s just not worth it to operate them.”
“Well, here’s a conundrum for you,” I say. How much lower is your brand CPC compared to non-brand, or how much higher is the conversion rate of recurring customers compared to first-timers?”
Even though you have an overall aim, you must keep in mind that each aspect will perform differently.
Moreover, the numerous performance levels must unite to funnel into a single performance KPI (Key Performance Indicator) (Key Performance Indicator).
If you eliminate any attempts that don’t match the aggregate KPI you established across the board, you won’t be able to attract new clients, and your traffic will gradually dwindle.
“Client N” is what we see here.
They are an e-commerce business that offers bacon and other smoked meats directly to consumers (yes, it is delicious).
We divide our targets into two groups: basic brand vs. non-brand, as well as NTF (first-time buyers) vs. repeat buyers.
Our AOV (Average Order Value) is influenced by pricing, which is influenced by market prices, hence we prioritize conversion above ROAS (Return on Ad Spend).
We know that a consumer will make two to three purchases every year over the next five years.
While gaining repeat sales on our brand is extremely cost-effective and pays the bills, we know that it is now a depreciating asset.
Spoiler alert: Never stop assisting repeat customers, but push aggressively for new customers.
As a result, we have six separate KPIs (and their justifications):
CPC KPI at a low level.
Why: Because they are brand loyal and likely to buy, we want to keep the CPC (cost per click) as low as possible when directing them to the product we want to promote.
KPIs for high traffic and mid-level CPC.
Why: Brand awareness, generally a recipient of a gift or other marketing, high conversion likelihood, CPC is more expensive, so if we can control it, the LTV ROAS will be higher.
“Client S” is another example.
They are a nationwide chain of senior living homes.
Their main concentration is on generating leads through form submissions or long-distance phone calls.
We sort by brand and non-brand keywords, as well as the services supplied, as usual. As recurring income, each service has a variable lifetime value.
Independent living has a larger volume, a longer LTV, and lower revenue per person than assisted living.
Memory Care, on the other hand, has the lowest volume and the shortest LTV duration, but the highest beginning income in the first three years.
We operate with three different KPIs:
We establish the goal figures for each KPI after we’ve discovered the ones that are required.
This indicates that “Brand Repeat CPC cannot surpass $0.50” or “Non-Brand NTF must drive at least 250 clicks per week with a 15 percent impression share and a CPC not exceeding $0.75.”
For budget allocation, we split the budget from most value to least useful.
Then we’ll be able to see if the budget allocation will achieve the overall ROAS goals.