SEM bidding practice skills: competition analysis is critical

In my blog post yesterday, I randomly searched Baidu for two travel keywords and made some guesses about the display results. This serves as a exercise for competition analysis. As mentioned in the blog post, I have not been in touch with domestic advertisers and Baidu for a long time. I don't know the truth, but I am just guessing with you.

In the blog post, Mu Tu and will lin also made good guesses to see what they said:

"If I am a serving person, I will first use the keyword tool provided by the search engine tutorial to view the search volume and ranking valuation of these two keywords. In terms of these two keywords, "Yalong Bay Hotel" is a word with a large search volume. The average daily search volume is more than 20 thousand, and the price between the first and third places is between 5.7 and 8.5 yuan, the daily search volume of the "Yalong Bay Golden Palm Hotel" is 9000, with the top three ranked between 1.9 and 2.9. After learning about the basic data, I decided to develop my own promotion solution based on the characteristics and budget of my website. If my promotion cost is limited, in addition, I am positioned to provide differentiated services, so I will use a large number of long-tail word bidding strategies to fight against big words, it will focus on selecting words with low search volume and low price to rank itself among the top three. That is to say, I prefer serving policies. Of course, this is ultimately related to the positioning of your website ."

Mutu's interpretation touched on three core elements: traffic, CPC, and budget, which were all crucial in the competition analysis. We will start later.

"Qunar should serve different advertisements for different hotels across the country, using different pages and bidding prices. There are no tools. Maybe they will not make that much differentiated pricing for the same city. Their brand effects have been established, their prices also have advantages, and their comparative platforms have sufficient authority. As long as they can be displayed on the left, they may think this is the most appropriate reward point. Basically, they adopt a strategy that follows elong and goes to Germany. There may also be an overall strategy for the second and second competitions between elong and Alibaba Cloud; Ctrip does not place advertisements for Baidu Bidding, not only in one region, but also in one hotel. This may also have their overall strategy; Qunar: the change in the ranking of a specific word is related to the number of competitors of the word, the bidding level, and the comparison of page quality, I personally think that their bidding price in the same region is not very different (for example, the Golden Palm may be slightly better because the page quality is relatively better ); The Yalong Bay Hotel and the Golden Palm hotel of Yalong Bay are treated differently from elong and may be placed in different advertising groups. The former should have a larger search volume and be treated as an entrance to Sanya hotel. The latter is a more specific product, to have a special comment page, and can be converted on the page. From the aspect of conversion rate to the willingness to offer higher bids for such words, the page quality may be better because of more content. the elong page now has some problems and cannot be accessed and compared."

Will lin analyzed every competitor and even different keywords, and repeatedly mentioned the overall strategy problem. This is also the focus of my upcoming discussion.

Let me first talk about the most eye-catching factor in this search result: Ctrip is completely absent. To confirm whether this is the adjustment of local SEM placement of Ctrip or the change of overall strategy, I searched several other popular travel keywords. One of the following is the result:

Hotel reservation search result

Ctrip is also absent from the "hotel" or "hotel reservation! The Chinese search market is a serious indicator of its low-level search behavior. The long tail is short and fine. In such a market, the big term in the header is crucial. The absence of Ctrip has changed a lot. Due to this change, I have to guess that Ctrip has adopted the geographic positioning method to exclude IP addresses outside of China; or scheduled advertising to avoid consumption in the early morning of Beijing time. Ask domestic readers to help verify whether Ctrip is indeed absent, or if I am in the United States and I am not in the scope of Ctrip's positioning.

Why are I most concerned about Ctrip? Because Ctrip occupies a monopoly in China's online tourism market, it is far from looking back at it as the second player. Ctrip's brand itself is a very large weight, enough to fully cause the fact of different products. In other words, if our products are the same as those of Ctrip, for example, the price and contract factors of the Golden Palm Hotel are the same, and other advertising conditions are the same, it is also very likely that most search users will complete the conversion on Ctrip. This means that Ctrip's price affordability is much better than ours.

For example, if the hotel is also a Golden Palm Hotel, each Conversion Commission is worth 50 yuan. Our CTR is 10%, and Ctrip's CTR is 15%. Our conversion rate is 5%, ctrip's conversion rate is 8%. For every one thousand presentations, we get 1000 x 10% = 100; Ctrip's click is 1000 x 15% = 150; our conversion is 100x5% = 5; ctrip's conversion is 150 × 8% = 12; the profit and loss balance CPC we can undertake is 50 × 5% = 2.5 yuan, ctrip's profit and loss balancing CPC is 50 × 8% = 4 yuan. For every one thousand presentations, we can earn 5 × 50 = 250 yuan, ctrip's income is 50 × 12 = 600 yuan.

Ctrip can bid nearly twice as much as we do, and its revenue is more than twice as high as ours. This is not the same level of competition. Therefore, if Ctrip participates in the competition, no matter where it is located, it is a great deterrent to other competitors. If it is willing to hit the high ranking, it will be more capable of bearing losses and recovering profits than other competitors. Back to my actual use case in yesterday's blog post. If we hit this travel term on Baidu Fengchao (with relatively low quality scores), Ctrip ranked third and fourth, although I will continue to have an impact, I dare not rashly set the largest CPC to a high of 25 yuan. Otherwise, I will feel very sad in the event that Ctrip will confront me with the whim.

If Ctrip has completely abandoned the SEM market for some reason (it is irresponsible to say that, from the observations of the past two years, Ctrip's SEM launch is not very ideal and fluctuating, the overall SEM strategy seems unstable. In fact, this is also reasonable, because we all know that China's online tourism market is different from that in Europe and the US, most of the effort is online, and the card is issued in the call center, the transaction volume completed online is relatively small .), Then this competition analysis is simple. In the search results, whether it is Yilong or where the heat island is, the competitiveness of any party is much more flexible.

Among the three elements mentioned by Mu Tu, the budget is the saddest one. In principle, budget constraints should not exist in the launch of SEM. The reason is very simple. The effect of SEM serving is almost immediately observed, that is, the ROI is real-time. If you are making money, what is the reason for spending your budget? If you lose money, even if there is still a budget left, it is not worth spending. However, in reality, the SEM management of most advertisers is carried out under budget constraints, which is a realistic limitation. Because the budget constraint is our factor, it is temporarily removed from the competition analysis.

The most important factor is CPC. If we are in a real competition, no matter what the competitor is, we should at least have a clear understanding of our own search and marketing effects. We (need) assume that our conversion rate is relatively stable, and this conversion rate will not change dramatically due to changes in rankings. If we know that the conversion rate of the "Golden Palm Hotel in Yalong Bay" is around 5%, and the value of each conversion is 50 yuan, we just calculated that the profit-loss balance CPC we can afford is 2.5 yuan. Even if we are willing to bear the impact of short-term losses, after a period of time, the actual CPC must be reduced to less than 2.5 yuan, otherwise this advertising is meaningless.

When you understand your own situation, you can make guesses about your competitors. According to our query results, the contract price of the hotel is different. Although the Commission is a trade secret, the hotel is a highly competitive mature market, the approximate Commission of competitors can be inferred. If we think that Yilong's commission is 10 yuan lower than ours, then in the case of a close conversion rate, its CPC's affordability is 40 × 5% = 2 yuan. Even if its conversion rate is 7%, the CPC's affordability is 40 × 7% = 2.8 yuan, it is still possible to fight against this.

Of course, this calculation does not include the quality score factor. Because the quality score factor is too complex and difficult to grasp, my suggestion is to optimize or review the advertisement, arrival URL, and website process during the competition analysis process. We cannot guarantee that we are better than our competitors, but we can strive to do our best.

When our variable factors are left with only one CPC, the key to competition analysis lies in estimating the conversion rate of competitors. The registration conversion path can be simulated, and the corresponding conversion rate can be obtained through the AB test. The difficulty lies in the estimation of brand influence. To a large extent, this is a rational guess (educated guess), which is also the charm of market competition. If everything can be figured out in advance, there will be no bidding skills, all of them are fruits of separation.

Once we make a preliminary competitive analysis and start to try the impact, all previous static computing will be voided. Once the competitor gives feedback, this is a melee process, and it is more endurance than the guess of who is close to the fact. If competitors adopt a follow-up strategy like this, the long tail word "Yalong Bay Golden Palm Hotel" may not cause dynamic competition. Although almost every customer said that they would use a long tail to fight against big words, in practice, large advertisers have limited energy to invest in long-tail words similar to 9000 of daily traffic. Even the keywords like "Yalong Bay Hotel" are not big words. What truly can take the initiative in the market is the monopoly like Ctrip. Even if Yilong has adopted automated management tools, as long as it is based on the current situation of management, it can only improve its anti-attack capability to a certain extent, it is usually difficult to respond to attacks launched by competitors in a timely and effective manner.

But under what circumstances are we more willing to bear the impact of losses? This is related to the traffic mentioned by Mu Tu. Competitive bidding is a complicated price management. Even when using automated tools, it still requires considerable manpower investment. According to Mu Tu's search results, the word "Yalong Bay Golden Palm Hotel" shows a total of 9000 traffic records per day. Even if all traffic records are obtained (of course not possible), if the click rate is 10%, only 900 clicks are made, 45 conversion, 2250 yuan of gross income. The cost of scanning and scanning (SEM) placement is not much left even when other costs are not calculated. Search and marketing administrators are required to determine whether this job is a top priority.

Well, all of the above are not responsible for YY. Please do not consider the two-screen search as a serious issue. We continue to emphasize that we only care about the idea of competition analysis. In the real market, in many cases, there is a comprehensive order of magnitude difference between competitors. At this time, any impact is futile and there is no way to make effective competition analysis. Competition analysis focuses on non-current-situation-based spot price management. It is about "don't accept your destiny", but only by knowing yourself and yourself will you be eligible to "not accept your destiny". Otherwise, you will find yourself dead.

Accurate self-positioning and account optimization are top priorities in any situation. Ranking, CPC, and traffic are all floating clouds. What makes sense is the ROI. Do not put the horse upside down.