It is a well-know best practice to use words like “buy” or “discount” in paid search ad copies. But do search words like “buy“ or “discount” really improve the key performance indicators of your retail AdWords campaigns? That’s what I want to find out.
Let’s have a look at the theory first. If a search query contains “buy”, “online shop” or something similar, you know that the user really wants to buy something – it is nobody who wants to gather some information about fashion or price. He or she really wants to shop. So what you would expect is a higher conversion rate compared to keywords without the buy-indicator.
If someone searches for “discount”, “cheap” or “sale” you also know that he or she wants to shop. But you know more than this, you know that he/she is a price-conscious buyer. So the conversion rate will depend on how many inexpensive or reduced articles show up on your landing page. On the other hand, it is likely that the average basket value and therefore key metrics like earning per click (EPC) or return on investment (ROI) are lower.
Now let’s have a look at the data. I analysed a big US fashion retailer, looking only at the generic keywords, i. e. all keywords that do not contain a brand name or designer. My findings are:
1) Buy-words compared to keywords that do not contain “buy” or “discount”
- Average basket value is higher (overall about +30%)
- Conversion rate is not generally higher. Overall, conversion rate is actually 25% lower.
2) Discount-words compared to keywords that do not contain “buy” or “discount”
- Conversion Rate and EPC are a lot lower (about -50%)
- Click-through rate is a lot higher (+75%)
- Average basket value is lower (-15%)
Looking at the results, it can make sense to have a closer look to indicators like “buy” and “discount” in order to calculate your bids. Like the theory states, the average basket value is higher when using “buy” in your ad copy. But different than expected, the conversion rate isn’t higher compared to keywords without the buy-indicator. Only “maternity clothes” comes close. While the CTR is a lot higher when using “discount”, the assumption that CR and EPC will suffer because of low basket values was right. However, be careful not to take the average results of my analysis as granted. As the example shows clearly (in the maternity area), numbers can change substantially from shop to shop and from area to area.
I wasn’t able to find any other public studies in the retail sector. But if you are interested in the travel sector, have a look at this blog post of Alan Mitchell on searchenginepeople.com.