4 basic rules to automate your marketplace ads & increase spend efficiency

By 
Nishant Singh Didawat
Feb 9, 2022
Strategy

Once you’ve set up advertising campaigns on marketplaces like Shopee, Lazada, Tokopedia, the next step is to optimise your ad budget to achieve key objectives such as higher impressions for certain SKUs or maintain a search rank position in the top five. This is, of course, in hopes of generating higher gross merchandise value (GMV), while maintaining a positive return on ad spend (ROAS).

Optimisation is by far the most challenging part of operating a marketplace store where competition is high for shopper attention. Most sellers don’t have massive ad budgets to have their products on display all the time, and due to the dynamic nature of real-time ad bidding, a product’s search rank can move up or down without constant monitoring and bid adjustments.

While other factors such as price, product thumbnail, and reviews influence conversion, the ad bid is critical to increasing a product’s visibility and likelihood to convert to sales - you will never buy what you can’t see. 

Epsilo ecommerce optimisation software offers the #HyperAutomation feature to allow sellers to manage ad bids automatically with rules and meet business objectives.

The following examples of rule-led automation are popular among Epsilo users as they help them save time and increase efficiency during busy campaign periods and even day to day.


Rule #1: Pause ads for Hero SKUs nearing out of stock and resume ads once they are back with sufficient stock

Almost every brand has a bunch of Hero SKUs (the best performing products in your online portfolio) or SKUs that consistently sell a certain quantity on a daily basis organically to maximise ROAS.

For example, we have a shampoo that sells 10 units daily and organically. In this case, it’s wise to set up the following rule based on the known sell through rate - if stock qty <10, pause ads for the SKU. Similarly, If stock qty >10, start ads for the SKU.

To generalise,
If stock qty < average # of units sold organically daily, pause ads for the SKU. Similarly,
If stock qty > average # of units sold organically daily, start ads for the SKU

Rule #2: Pause ads for SKUs that have 0 Add to Carts (A2C) for the last 30/45 days

SKUs that have gotten impressions and clicks over a period of time (a week, month, etc.), but haven’t received any add-to-carts or sales can be paused to reallocate ad spend to better performing portfolio items. This should also trigger sellers to make changes to the product listing to improve the conversion rate (ex. bid on another keyword, add a promotion, increase reviews, offer free delivery, etc.).

Note that this rule needs to be specific for a certain time period and other conversion factors should be taken into account for lack of sales and not only the keywords being bid on.

An example of this rule below:

If L45D, Clicks > 3 times (average # clicks required for conversion) and if Add to Carts = zero, pause SKU-ad.

Rule #3: Bid smart to maintain top search positions for top performing keywords

For many brands, a high percentage of overall sales are driven by brand keywords ads. This makes it imperative to secure top search positions - generally in top 10 - for Shopee and Tokopedia. Having said that, it’s important to understand two aspects when adopting a keyword strategy to grab more share of search:

  1. A higher search position will maximise product visibility but doesn’t guarantee higher ROAS because the most popular search terms require higher spend and ROAS is also heavily dependent on a product’s price point.
  2. ROAS expectations should also be different for Brand vs Competition vs Generic keywords. For example, ROAS is generally higher for Brand keywords vs Competitor keywords because shoppers are more likely to click and buy your product when searching for your brand.

Rules to boost share of search while maintaining ROAS:

  • To scale up - If current SKU position ≥ 5 and Last 7 Day ROAS is > Target ROAS, increase bid by 10% (need a bid cap)
  • To scale down - If current position ≥ 10 and ROAS is < Target ROAS, decrease bid by 10% (need a bid cap)

Rule #4: Provide scale up opportunities to Emerging SKUs

There are many SKUs that get popular during specific periods of the year, times of the week, or even during mega-sale days. For example, running shoes become popular during late December for New Year’s resolutions and certain mobile phone models skyrocket during the month of their release.

These are Emerging SKUs that show high levels of impressions and clicks but lack in GMV when comparing two different time periods.

To capture the potential of these Emerging SKUs, sellers can set up rules such as:

If Last 3 Day CTR > Previous 7 Day CTR and Last 3 Day CR (Conversion Rate) > Previous 7 Day CR, increase bid by 10% (need a bid cap)

Once these rules have been set up, they can be applied to multiple SKUs across your entire portfolio in a few clicks. It’s ideal to set up these rules before going live with any campaign so you’re maximising your ad spend right from the beginning.

Our users easily save 2-3 hours everyday with these rules and spend the time working on their sales strategy or next product launch. Try it for yourself!

Let Epsilo help you maximise your marketplace ad budget in real time and scale 24/7, 365 days. Contact us for a free demo

Image cr: Justin Veenema

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