When it comes to digital marketing campaigns, few retailers appropriate their budgets based on their sales funnel.

Channels like social media, content, traditional display advertising, and affiliate marketing focus towards the top of the funnel, and so they don’t translate into sales as much as they focus on branding and building awareness.

On the other hand, the 5 channels below represent the online retail heavy hitters: the channels designed to turn shoppers into customers in the short-term. These tools should be used to push your bottom line and will be the biggest test to your site’s ability to convert bottom-of-the-funnel traffic. In my opinion, your online marketing budget should be skewed in favor of these 4 channels for 2020.

5. Google Adwords

Why it’s Bottom-of-the-Funnel

People who click on ads to find a solution have a sense of urgency. They’re typically past the research phase and are more willing to convert now. For retailers, AdWords is a reliable way to have your store seen for keywords (typically longtail) that indicate a high-intent to purchase.

These text ads have powerful audience segmentation capabilities which are designed to maximize conversions and ROAS.

Is it Right For You?

One harsh truth is that AdWords isn’t cheap. The program has been Google’s cash cow for ~10 years now, and the side effect of that longevity is a very cluttered space and high CPCs (cost per clicks). Only retailers who have a significant budget for PPC alone should even try out AdWords, typically ranging from at least $3,000-$5000/month in available click-spend.

Of course, retailers without the means and expertise to manage AdWords should also stray away from the program because of its steep learning curve. An intermediate-level PPC manager will not be able to take advantage of the full-breadth of capabilities AdWords has to offer, and a high COS will ultimately reflect that.

How to Best Leverage It

You’ll need 3 things to get the most out of the program: a high budget, a PPC expert, and a Google Analytics account (leveraging GA data is key). There is a strong foundation of well-known industry best practices, including geo-targeting, remarketing lists for search ads (RLSAs), competitive intelligence, and a sound campaign structure (will vary), but a large bulk of the work will go into doing extensive keyword research beforehand.

4. Google Product Listing Ads

Why it’s Bottom-of-the-Funnel

No product advertising channel has risen to prominence as quickly as Google PLAs have. It’s a relatively new product advertising channel that has cemented itself as one of Google’s main business focuses. 2014 will be another huge year for the program and the retailers that use it.

PLAs are bottom of the funnel because A) they click-through better than AdWords text ads, B) they occupy much of the Google SERP (search engine results page), and C) if a shopper isn’t starting their buying process on Amazon, they’re starting it on Google.

Is it Right For You?

One of the benefits of PLAs is that it’s still a newish program, and the CPCs reflect that. A retailer can be significantly more competitive on PLAs than they could be on Amazon. There are several questions to ask yourself before subscribing to Google PLAs, but the 2 major criteria are product count and site optimization.

Typically speaking, a retailer with over 1000 SKUs is eligible for PLAs. Any less and overall product exposure is difficult to achieve. A retailer’s webstore must also be optimized for conversions on the product page because unlike Amazon Marketplace, Product Listing Ads take the shopper to convert on your site. Failing to convert a shopper who clicked on your ad is thus mostly the retailer’s fault.

Unlike AdWords, PLA budget is much more flexible because of the program’s open-market bidding model, meaning a retailer can bid as low as 1 cent per click on a product to receive exposure.

How to Best Leverage It

Best practices for PLAs aren’t quite as cemented as those for AdWords, yet, at the core of it, it comes down to consistent feed and bidding management. Like Amazon, a retailer must have a feed submission process in place (to account for out of stock products, new SKU additions, etc.) as well as optimized feed content (product descriptions, titles, column attributes, etc.).

Campaign structure is critical for PLA management as well, especially with the new Shopping Campaigns model rolling out this year. For all things Product Listing Ads, here’s a comprehensive ebook.

3. Amazon Marketplace

Why it’s Bottom-of-the-Funnel

The reality is that nowadays, few shoppers don’t go to Amazon as the first place to start their buying process. The marketplace is seen as a reliable and comprehensive hub for the lowest prices for products, peer reviews, and reliable shipping.

Advertising on Amazon immediately exposes a retailer to the significant pool of built-in traffic that the site receives monthly (about 80 million people).

Is it Right For You?

Because the Amazon Marketplace is a crowded place (~2 million third party sellers), being price competitive is key. Free shipping and seller/product reviews on Amazon are commonplace, so the best way to distinguish yourself here is by having the lowest price (and a lot of reviews).

On top of that, your margins have to be pretty good since Amazon will be taking a solid portion of your sales because of their CPA model (cost per acquisition). Viewed more optimistically, you only have to pay when your products convert.

Amazon is also pretty good at filtering out unreliable sellers, or those with poor fulfillment history and negative seller/product reviews. If this sounds like you, it’s unlikely you’ll be accepted onto the marketplace.

How to Best Leverage It

For any feed-based advertising program, it’s essential to have a consistent and frequent product feed submission process in place. On that note, your product feed should also be optimized for longtail search queries (which typically indicate a higher intent to purchase).

It’s important to always be on the good graces of Amazon and maintain a positive seller rating. On a more subjective note, I don’t recommend using FBA (Fulfillment by Amazon), which is a course of action for a lot of smaller retailers with poor fulfillment processes in place, because it puts your business in Amazon’s powerful and often manipulative hands. There are far too many FBA nightmare stories for me to reliably promote the program, and it also puts your business at risk for poaching.

2. Google Dynamic Re-marketing

Why it’s Bottom-of-the-Funnel

At its core, retargeting in general is an essential practice for any eCommerce store. It’s a great way to target shoppers who have already been exposed to your site before, preaching, “Hey remember my site?”

Yet Google Dynamic Remarketing (introduced mid 2013) takes retargeting a step further and offers product-specific retargeting ads. Now instead of promoting just your site, you can say, “Hey remember products X, Y, and Z you checked out?”

Couple this with the reach and segmentation capabilities of the Google Display Network as well as targeted offers (ex. 20% off if you check out today), and Dynamic Remarketing quickly becomes an effective tool to reach shoppers who have been to your site before, have added to cart (then abandoned), or even checked out at your store in the past (i.e. targeting bottom-of-the-funnel traffic).

Is it Right For You?

Like Product Listing Ads, Dynamic Remarketing is feed-based. It actually uses the same feed you’d send to the Google Merchant Center for PLAs anyway, so it couples as a great supplement to existing PLA campaigns.

Retailers should have that feed submission process in place and that’s about it. Ad designers aren’t necessary since you can design the ads yourself and campaign setup and optimization is nowhere near as complicated as AdWords or PLAs.

How to Best Leverage It

Create a Google Merchant account and submit your feed. Best practices include honing in your segmentation, adding targeted offers, ad design, and A/B testing.

1. Facebook Ads

Why it’s Bottom-of-the-Funnel

Facebook has evolved over the past few years into one of the most powerful marketing platforms. With 2.6 billion active monthly users, and highly sophisticated Ads Manager that uses user-profiles and their behavioral data to increase targeting efficacy, Facebook is great for targeting hot leads with the highest probability of converting.

Using Facebook pixel, marketers can now track user activity on their eCommerce websites and reliably determine and target these very users with bottom of funnel ads in their feeds.

There are 3 campaign conversion objectives provided in the Facebook ad manager built specifically to target leads at the bottom of the funnel. These are; conversions, Catalog Sales, and Store Traffic.

How to Best Leverage It

Facebook provides many types of ad formats. The best ad types for conversion at the bottom of the funnel are:

  • Image Ads,
  • Dynamic Product ads,
  • and Carousel ads

Use image ads if you are selling a single product or service. Carousel ads are better suited for ads showcasing best selling products to users who have already visited your web store. Dynamic product ads on the other hand automatically display products users have already expressed interest in.

At the end of the day, your digital marketing budget allocation for 2020 should reflect where shoppers are most likely going to convert. Follow the data, constantly assess channel performance, and keep on testing.