Posted by Isiah Drake, Manager, Bid Strategy Team
There are two instances where an advertiser should increase the ERS goal for their paid search program:
1. When marketing pushes out a new initiative or product that does not yet have much brand awareness
2. When goals become unrealistic to the program
When an advertiser pushes their paid search program because they dropped a new catalog or marketing initiative, this sometimes does not translate into good ROI. Consider an advertiser who wants to promote a new product or launch a new brand name. In the beginning, the brand terms for that new product will be over the ERS goal due to searchers’ unfamiliarity with the product or brand. Some verticals are extremely brand-centric, the majority of conversions happening on brand terms. To effectively promote the product, an increased ERS is necessary to gain brand awareness on all terms.
Pushing on any term that generally that does not convert will increase the ERS. For instance, pushing the keyword “Halloween costume” in mid-July would likely not convert well, even if the advertiser was running a promotion. Because onsite conversion should increase during a promotion, sometimes during a promotion is an opportune time to push the paid search program. This should be in conjunction with an ERS that is lower than the goal. In the same way advertisers use their brand to offset the generic ERS, an advertiser can undershoot the goal and then push the program at specific or strategic times. This allows the advertiser to be controlled and targeted with their spend. However, in doing this, the advertiser must be very careful with calculations, as higher ERS with higher spends will always outweigh the effect of under-spending.
Unrealistic goals can hinder a program’s performance. For example, a program can have 3% ERS and only convert at 53% or higher ERS. In this case, an advertiser should perform a severe cut to the program in order to reach goal. The next step would be to cut terms not performing within goal. Once the program has been audited and optimized, the expectations of the advertiser need to be reset.