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We Closed 2020. Is Your Digital Strategy Ready For 2021?

Needless to say, 2020 was a year like no other. Some advertisers were feeling the effects of reduced brick-and-mortar activity, while others rode the wave of increased eCommerce adoption. While most of us are ready to put the year of never-ending Zoom calls and virtual learning behind us, many advertisers are scratching their heads thinking about 2021 – either for recovery planning or making sure to capitalize on the gains from the shifts in the landscape. Below are some tips and considerations for SEM campaigns for 2021.

Be Nimble and Fluid

Forecasting is always challenging but forecasting 2021 is nearly impossible. 2020 has taught us the value of being nimble and flexible. As you plan your budgets and campaigns for 2021, leaving room for adjustments and quick reaction might be advantageous. Still too often we see strict monthly budgets that are spent without consideration for ROI or a blind desire to simply chase year-over-year growth.

With SEM, we have clear user intent signals through search behavior that we can lean on to drive results when the demand is there rather than when our forecasts suggested it should be. While it is important to plan and strategize, time is better spent deciding which key performance indicators (KPIs) to prioritize and what should trigger a change in current strategy. For example, inventory falling below a certain threshold would trigger a reduction in shopping campaign spend, a competitor dropping out of auction would trigger a change in ROI goal for SEM campaigns, etc.

For advertisers optimizing towards omni-channel goals, there might be additional considerations – and flexibility needed - for bidding and optimization. With store traffic being dependent on state and federal regulations regarding the pandemic, in-store conversion and average order value metrics will be shifting constantly. As we highlighted in our latest Digital Marketing Report, in-store retail visits produced by Google search ads continued to improve and steadied out. We also observed an increase of in-store conversion rates as users make more intentional shopping trips. Since in-store reporting is delayed, advertisers might need to make proactive adjustments to better inform their automated bid strategies and help them catch up with changing user behavior faster.

Daily Store Visits

Handle New Customers Carefully

Many advertisers saw an uptick in new customers in 2021, either new-to-file overall or new to eCommerce. There are tried and true approaches on maintaining these customers and creating loyalty, but some of them might not work for the customers acquired in 2020.

First, we need to understand the motivations of these users. McKinsey’s latest research on consumer sentiment revealed that 35 percent of United States consumers have tried a new brand since the crisis began while 77 percent have also tried new shopping behaviors, including new channels, stores, and brands. However, the reasons for that unprecedented shift include product availability and price. With shipping and inventory restrictions, having an item in-stock was enough to grab a new customer, but it also made it harder to highlight your value proposition beyond inventory availability. 2021 should be a year to focus on that for future success.

For SEM specifically, these factors will influence your audience approach. First, start with stronger user segmentation. While historically it may have been enough to focus on audience strategy based on recency, this year incorporate specific timeframes to your strategy (e.g. new customers who bought between April 1 – May 15, 2020 or customers who bought backordered items). Don’t forget about your suppression approach – for example, a subset of your new customers may have been opportunistic when stock issues were at their peak, placing the same order at multiple brands and then canceling orders. Your bidding strategy might need to be altered based on these insights as historic lifetime value assumptions will no longer apply, at least for sub-segments of these audiences. Once you understand the nuances of customers acquired in 2020 and properly segment the audiences, utilize them not only for bidding and insights, but also to test out audience-specific messaging.

Meet customers’ evolving needs

The pandemic brought changes in user behavior, from changing the way we shop to the way we consume media. For SEM it meant changes to how, when, and where consumers search. As we progress throughout the year, we will meet customers where they are and provide experiences that they are expecting.

  • For paid search specifically, continue to stay on top of search query logs and make sure that your keyword and match type strategies offer just the right amount of flexibility to capture relevant new, emerging search queries with enough restriction to avoid poor matching and runaway spend.
  • Being less prescriptive with device and day-parting strategies can be advantageous as well. Leveraging automated bidding and shared budgets will allow you to be faster in shifting towards the devices and times that are peaking as users change behaviors.
  • For many, 2020 also meant an increase in app adoption. To make it more seamless and convenient for searchers, consider app deep linking for paid search campaigns.
  • Finally, make sure your messaging highlights benefits that are relevant to the current climate. Outside of the promotional messaging that has worked in the past, other types of value propositions will likely gain importance in 2021. Brick and mortar retailers should consider highlighting pick up options and cashierless checkout. All businesses can offer “buy now, pay later” as an advantage in a strained economy, as well as reassurance on inventory and availability to ship fast.

As McKinsey put it, “with continued pressure on household income, consumers continue to try new brands and channels, with convenience and better value being the primary drivers of the new behavior. Three out of four American consumers have tried a new shopping behavior, and most intend to continue the new shopping behavior even after COVID-19 subsides”. As we continue through accelerated shifts in user behavior and advertiser strategy, winners will create marketing strategies – and execute SEM campaigns – with continuous adjustment, customer first focus, and openness to new approaches and tests.

Want to learn more? Check out Merkle's Q3 Digital Marketing Report here.