MA Topic Title Paid Search Analytics: The Case of Big Data Analytics for French Cosmetics Company. The purpose of this study is to select a metric to measure the effectiveness of paid search and help Lancôme's e-commerce team gain a better understanding of paid search users.
Introduction
Background
The 7th generation of pay per click led to the development of search engine marketing. With the development of the Internet and the growth of Internet users, the search engine market has expanded rapidly.
Research motivation and goal
According to relevant data, nearly 80% of Internet users choose the search engine to get information, and a large proportion of Internet users have a strong sense of dependence on the search engine.2 Now, search engine advertising is made the best promotion channel for small and small. medium enterprises.
Research questions
8 c) Measuring the effectiveness of keywords in paid search channel for .. d) Current Lancôme paid search user behavior and the rationale behind it.
Literature review on theoretical background of paid search
Digital economy
- The concept of digital economy
- Characteristics of digital economy
- The change of marketing strategy during Digital Economy Era
- The significance of marketing strategy transformation
Enterprises should also strengthen the adjustment of marketing strategies and promote the diversification of enterprise transaction mode to promote the continuous development of enterprises and make network marketing more reasonable. Furthermore, by understanding the types and times of consumers' browsing, we can also carry out fixed-point marketing for consumers to stimulate consumers' desire to buy and continuously expand the market space of enterprises.
Search engine marketing
- The concept of search engine marketing
- The mode of search engine marketing
- Paid search advertising
Most of the time, decision making about paid keywords in the e-commerce team is based on past experience. Women are the most important paid search group, accounting for 84% of the total number of paid search users.
Paid search business
Russian cosmetic market overview
- Market sales
- Category segmentation
- Market distribution
Sales of facial skin care accounted for the highest value in the Russian cosmetics market in 2020, equivalent to 19% of the total market value. Facial skin care is the largest segment of the cosmetic market in Russia, which has grown in recent years.
Five forces analysis on Russian cosmetic market
- Buyer power
- Supplier power
- New entrants
- Threat of substitutes
- Degree of rivalry
- Conclusion
The Russian cosmetics market consists of several brands (such as L'Oréal, Coty), some of which are widely known and have a strong market position. The financial power of big companies like L'Oréal and Avon make it difficult for smaller entrants to compete on price.
Lancôme paid search business background
- Business Profile
- Current paid search working process from e-commerce perspective
- Managerial problems
The current paid search workflow from the perspective of the e-commerce department mainly consists of four phases involving three participants. The e-commerce team sets the keywords in paid search channel according to their business needs. Affected by the epidemic in 2020, paid search traffic has increased, so the e-commerce team has increased the frequency of reviewing paid search results, updating keywords once a quarter.
In the paid search business, they don't directly contact users, so they know very little about paid search users. Therefore, in paid search, although the team has log data from Google Analytics and Yandex Metrica, no one. So essentially all decisions about keyword settings in paid search are based on previous work experience, not data support.
The penetration of the paid search business in Russia has increased due to the spread of Internet access. Therefore, we mainly focused on the group of paid search users who ultimately complete the purchase in our study.
Research methodology and research framework
In turn, we aim to have a deep understanding of the groups that complete the purchase to support the business growth of Lancôme's e-commerce team. Data preprocessing: data cleaning and data recombination and efficiency measurement Find the correlation between the efficiency of keywords and other indicators in the data set using logit regression Test the most efficient keywords in real business. In this chapter, we first researched the Russian cosmetics market to better understand the context of Lancôme's paid research business and applied the five forces analysis method to make an overall analysis of the Russian cosmetics market.
The Russian cosmetic market has maintained a compound annual growth rate of 3.9% over the past five years, and various types of cosmetic products have also seen general sales growth. From the Five Forces analysis perspective, buyer power, degree of rivalry, supplier power and new entrants in the Russian cosmetics market are moderate, while substitutes are relatively low. In the era of the digital economy, "consumer-centric" has become the goal of many companies' marketing campaigns.
Our research on the effectiveness of paid search can improve Lancôme's marketing performance in the cosmetics market. We then organized and recorded the entire paid search business and decision-making process at Lancome through interviews with Lancome's e-commerce manager to have a full understanding of the background of our case study.
Paid search analysis
Part one - paid search keyword efficiency
- KPI on marketing campaign
- Regression analysis
In this research, according to the working practice of Lancôme's e-commerce department, they mainly focus on the financial revenue generated by the paid search channel. Logistic regression is a basic classification technique and one of the common methods of data mining and machine learning. Binary logistic regression is one of the most commonly used forms, and its dependent variable contains only two categorical values.
When the dependent variable is binary (0/1, True/False, Yes/No), logistic regression should be used. According to the magnitude of the probability value and the classification threshold determined according to the business scenario, it is mapped to the. Due to the value range of the variable, it is necessary to choose a suitable activation function to map the output to [0,1] and the Logit function meets the requirements.
Effectiveness as a dependent variable is a binary dependent variable that meets the requirements of the logistic regression model and is suitable for logistic regression. The prediction accuracy of the model has reached 90%, which is a more reliable logistic regression model.
Part two - paid search user behaviour understanding
- Data introduction
- Methodology
- Result
In terms of regional distribution, the top five regions in terms of the number of paid search users are the Moscow region (including Moscow and Moscow Oblast), St. According to mobile device tracking data, 90% of paid search users are using Apple, Samsung, Huawei, and Xiaomi. The number of user interactions in the 18-24 age group increased significantly in the fourth quarter of 2020.
The number of user interactions in the age group 45-54 years is lower than for users in the fourth quarter age group 18-24 years. In the fourth quarter, the Lancôme team was able to add keywords to products that the 18-24 age group is interested in and increase traffic and budget. Under the influence of the epidemic, people have become more targeted in using paid search.
The AOI in the first quarter was the highest among the overall AOI and the lowest in the fourth quarter. The peak of male transactions was in the fourth quarter while the peak of female transactions was in the third quarter. Keyword search settings should focus on women in the third trimester and men in the fourth trimester.
From the perspective of Average order revenue, men are higher than women and reached the highest in the fourth quarter.
Discussions
Keywords test on real business
Increasing budget and traffic increased clicks on these keywords by 50%, which is a good start, as we expected. It is necessary to observe the long-term changes caused by changing budget and traffic for paid search. There are no major marketing campaigns this quarter and the number of holidays is also limited.
Therefore, compared to other quarters of the year, the income from paid search channel in this quarter is reasonably correspondent less.
Impact of the Covid-19 epidemic
- On Russian cosmetics market
- On Lancôme paid search
64 Similarly, competition in the cosmetics industry is also fiercer due to the more balanced information consumers get when they shop online, which can lead to more marketing activities to get consumers at low prices. Overall, the challenges facing the cosmetics industry due to the impact of the covid-19 epidemic are all-encompassing, including the challenges of upstream supplier channels and the increased production pressure and competition in the industry. Due to the impact of Covid-19 on the economy, people are using paid search in a more targeted way, reducing unnecessary page views and personal consumption expenses. a) The brand has made great efforts in marketing, so the brand influence has increased.
This year, the frequency of setting keywords has been increased to once a month, and we are optimistic about the paid search performance in 2021. 65 We believe that due to the impact of the coronavirus epidemic, online shopping scenarios are rapidly replacing traditional offline shopping scenarios and will continue for some time in the future. According to a survey of US consumers by research firm Morning Consult, 24% of consumers currently say they may feel uncomfortable shopping at the mall in the next six months; 16% of consumers need three months of buffer time.6 Same situation in Russia, a study by Viber and Sbermarket showed that online shopping is gradually replacing people with shopping, especially in 2020.
During the COVID-19 pandemic, convenience, security and frequency of shopping are more important to shoppers than ever before. At the same time, this phase is also an ideal experimental environment that supports the rapid tracking and testing of related businesses to launch premium, a combination of experience and data-driven services to meet consumer demands.
Paid search in practice
66 The data research in this article shows that paid search advertising is better for new users or users who are not very active (such as men, remote regions, etc.), but most of the cost of search promotion is covered by active old users. 7. But for a world-famous brand like Lancôme, the user group targeted by paid search is often already old users of the brand, which leads to the fact that the majority of clicks come from old users. The purpose of this research is to understand the paid search performance and user characteristics of the Lancôme brand paid search and to provide Lancôme with management suggestions that can improve the performance of paid search.
The paid search data provided by Lancôme is presented in the form of tables with different dimensions. Based on the characteristics of the data collected by Lancôme in the actual work, the study analyzed various indicators for evaluating marketing activities and finally concluded that it is most appropriate to use ROMI to evaluate the effectiveness of paid search channels. As a result, according to the final constructed model, we believe that new users are groups that can bring more revenue to the paid search channel.
Finally, we provided managerial recommendations to Lancôme based on our study to help them improve paid search activities. Running and Hunting - The Competition Between Paid Search Marketing and Search Engine Optimization[C]//2014 47th Hawaii International Conference on Systems Science.
