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Clothes.com

Agenda

Agenda

  • Understanding Key Metrics
  • Performance Overview
  • Suggestions for Optimization

Criteo

Criteo Model

  • Show personalized online recommendations to customers who previously visited Clothes.com
  • Operate on Post-Click Model
  • Attribute sale only if user clicks on banner/ad
  • Only pay for clicks you receive
  • Criteo Advantage
  • Show the Right Ad to the Right People at the Right Time

Goals &

Conditions

Goal & Conditions

  • Optimize Performance
  • Unlimited Spend
  • Keep Cost of Sale (COS) < 10%
  • One Metric We Can Control --> Cost per Click (CPC)

Leverage Cost Per Click (CPC) to maximize return at desired Cost of Sale (COS)%

Segments

Segments Review

  • Lower Funnel:
  • Any user who visited Clothes.com in the last 60 days
  • Easy conversion --> already close to buying
  • Customer Acquisition:
  • User who visited website w/o making purchase
  • User who never visited website
  • Hard conversion --> expensive but increases customer base
  • Audience Match:
  • Purchased from Clothes.com +12 months ago
  • Easy conversion --> already bought from Clothes.com

Understanding Key Metrics

Key Metrics

  • CPC
  • The metric we can impact
  • eCPM
  • Effective cost for 1000 impressions
  • CPO
  • Cost to Clothes.com for 1 order

eCPM

Understanding eCPM

  • eCPM →--> Effective Cost Per 1000 Impressions
  • eCPM = CTR x ↑CPC x 1000
  • KPI for how competitive Clothes.com is in the ad marketplace
  • Higher eCPM -->→ Higher quality of website ad placement (inventory) Clothes.com is able to win

Increasing CPC causes:

  • Higher eCPM
  • Better Inventory Quality
  • Stronger Overall Competition Win
  • Lower COS

Importance of eCPM

  • eCPM affects Overall Competition Win (OCW)
  • OCW →--> % of impressions won vs impressions available
  • Example: Customer Acquisition Campaign
  • Lowest eCPM --> $1.16
  • Lowest Overall Competition Win --> 0.03%

CPO

Understanding CPO

CPO is the Cost for Clothes.com to get 1 Order

  • KPI to compare investment across different campaigns

CPO = Cost of Campaign/# of Conversions

CPO = ↑CPC / CR

  • Instinct to be against increasing CPC because it increases cost
  • Although when you increase CPC it increases CPO, it also influences CR
  • CR can increase more than CPC ultimately--> decreasing CPO
  • 2 Parts of Sale: Lead Generation and Converting
  • Conceptual Example:
  • Leading a horse to water --> Lead Generation
  • Horse actually drinking water -->→ Conversion

How It Connects

How It All Connects

Only metric we can impact --> Cost Per Click (CPC)

More Conversions!

More Clicks

More Impressions

More Effective Campaigns

&

More Competitive Ad Placement

Increase CPC

Increases eCPM

&

Increases CPO

Performance

Performance

COS

Cost of Sale (COS)

COS --> Measure of Effectiveness | Goal→ COS < 10%

  • How much money spent to achieve sale gains

COS = (Cost of Campaign / Revenue Generated)*100

COS = (Clicks x CPC) / (Sales(PC) x AOV)*100

COS --> A proportion of Cost and Revenue

  • Adjust CPC --> Leverage Best Performing Campaigns --> Maximize Revenue while Driving Down COS

CR

Conversion Rate (CR)

CR: Show an ad to a segment and x% of the time people will purchase

Conversion Rate = (Sales PC / Clicks)*100

  • Total CR = 3.10%
  • Lower Funnel CR = 2.66%
  • Customer Acquisition CR = 0.31%
  • Audience Match CR = 3.73%

Differences in CR

Returning Customers (Lower Funnel)

  • Know product
  • Fewer visits to convert
  • Less barriers to conversion
  • CTR = 1.09%

New Visitors (Customer Acquisition)

  • Never purchased product before
  • Higher visits and exploration to convert
  • High barriers to conversion
  • CTR = 0.38%

Additional

Additional Results

Result Similarities to Other Advertisers in Vertical?

  • New customer and returning customer CR divergence compared to other retailers
  • AOV comparable ($50-$60)
  • Overall Competition Win a little low

Highest COS --> Customer Acquisition (149.5%)

  • Hardest to generate conversions
  • Goal is to increase customer base
  • Invest in future "Lower Funnel"

Optimizations

Optimization

CPC Changes

CPC Recommendations

CPC Segment Recommendations to Align with COS Goal of 10%

  • Increase Lower Funnel CPC from $0.27 to $0.31
  • Decrease Customer Acquisition CPC from $0.30 to $0.21
  • Increase Audience Match CPC from $0.46 to $0.52

Results in Total:

  • Increase Total CPC from $0.28 to $0.39
  • Maximised Revenue (129% Increase)
  • Within Budget of COS < 10%
  • CPO Decreased from $9.18 --> $6.72
  • Overall Competition Win Increased from 0.06% --> 0.09%

Suggestions

Additional Suggestions

  • Increase AOV ($50-60) to decrease COS
  • At $75 --> free shipping
  • If want to keep free shipping at $50 --> then free 2-day shipping at $75
  • Utilize Criteo’s Dynamic Retargeting with Facebook Dynamic Product Ads
  • Targeted users and cross-device reach
  • +11% potential average sales gain
  • Personalized video ads
  • Kinetic Design --> personalized ads based on shopper & context
  • Already segmented audience, but can target based on
  • Site navigation
  • Search terms
  • Allow honest reviews to be listed on the website (Amazon style)
  • Satisfied with quality, fit as expected, etc...

Closing

Thank you!

Questions?

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